Charles Perron: This is Charles Perron in for Susan. Maybe first, talking about EWP, obviously, it’s encouraging to see that the market dynamic is for the volume outlook for the coming quarters. But when you think about I-joist specifically, you’ve seen obviously, OSB prices rising significantly through the first quarter, obviously, being quite elevated right now, you’ve talked about pricing erosion on EWP moderating, which is encouraging, but how should we think about the input cost and basically the margin dynamic, especially for I-joist in the near term, considering those dynamics together?
Kelly Hibbs: Yes. Sure. Charles. So yes, we feel really good about our I-joists position in the marketplace in general. And then specific to your question around cost, yes, OSB and web stock is a meaningful input cost for I-joist. As we’ve spoken before, though, we do have a kind of a 13-week average pricing mechanism at which we procure our OSB. And so we kind of lagged on the way up, and we also lagged on the way down and feel good about our ability to kind of continue to manage our cost base across the EWP in general.
Charles Perron: Okay. Yes, that’s helpful. And then sticking to that point about the commodity price moving. When you think about BMD specifically, how do you approach holding inventories in this environment where you see this price weakness? And what is your ability to some extent to predict that margin for the segment, let’s say, in the above the historical average of 3 to 4 that you’ve mentioned in the past?
Kelly Hibbs: Yes. So let me kick it off here and then we’ll see if Jeff or Nate want to provide some input here. So we — we’re certainly at a bit of a discovery period here. OSB has fallen significantly, still at very high levels compared to history, as you’ll note. But I guess, it’s fallen quite sharply. So we’re still in a bit of a discovery mode there. Plywood has been stable, but yes, it’s showing a little bit of weakness as well, just — I think it’s kind of correlating with OSB in that regard a little more in the south than in the West. So our ability to manage and mitigate, we’re going to be in the marketplace every day. We have really good visibility of what’s on the ground, what our cost position is. And we are — we’re not going to fall in love with our inventory. We’re going to move it. We’re going to turn it, and we’ll keep continuing to work down our position. But again, we’re going to be there for our customers. Anything you’d add, Jeff?
Jeff Strom: Yes. I would just add that overall, we saw this coming, and we worked really, really hard to lighten our position before it hit. So obviously, you’d always like to have a little bit less when print comes on as big it is, but we’re pretty well positioned for it.
Charles Perron: Okay. That’s very helpful color there. And maybe one last one. On the balance sheet. You guys repurchased some stock this quarter, which was encouraging to see considering your leverage. When you think about capital allocation going forward, is this something that we should expect more going forward? Or should we think about the dividends to remaining your favorite way of distributing capital to shareholders?
Kelly Hibbs: Yes. No, I guess I’d say it this way, Charles. So we’re committed to our approach. We’re very committed to our expanded capital program. I’d reiterate that we do expect to provide additional shareholder returns, assuming there’s no meaningful M&A surfaces. And then our playbook includes both, not share repurchases and special dividends, but it wouldn’t be appropriate in this forum to really communicate more than that in terms of timing and sizing and how that plays out exactly. But our expectation is we will we will be returning additional capital to shareholders, absent M&A in the balance of the year.
Operator: Our next question comes from the line of Mike Roxland at Truist.
Mike Roxland: Nate, Kelly, Jeff and Chris. Just want to have a follow-up on the last one. Jeff, you mentioned that you sort of saw this commodity price decline coming. So you worked really hard to lighten your physicians. Can you comment — you say you can comment, where do backlog stand? Or where book stand, OSB, lumber, plywood relative to normal?
Jeff Strom: I would say that on the lumber side, you can get what you need relatively quickly without any issues. In OSB, I’ll tell you during the run-up, it was very, very difficult to get. And now there’s definitely more available and people are looking for a home for it.
Mike Roxland: Got you. But in terms of your own inventory levels and how much you have in stock relative to, let’s say, where a normal level — a normalized level of inventory would be for, let’s say, was being lumber? Are you at that utilized level? Did you take it down below given the fact that you had some foresight that the turn was coming?
Jeff Strom: No, we’re actually in really good shape. There’s been no real reason to take any kind of position on the lumber studs. And so we say we’re going to have in stock and be ready, and we do. So I think we’re in a really good position there. On plywood, I think we’re — we have plenty. We’re in a good spot there. In OSB, which definitely had a big run, it was tough to get. And you could tell it was slowing down a little bit. We really did work hard. So overall, I’d say we’re kind of right where we should be, and it’s kind of a normal level.
Nate Jorgensen: Mike, it’s Nate. Maybe just to add to Jeff’s comments is in these kind of environments where commodities have come off. And obviously, OSB is a most recent example. There’s obviously hasn’t see in the marketplace, and I think our customers and suppliers as well look to us is a bit of a safe harbor. And so they’re going to go short. They’re going to be buying more heavily out of warehouse, maybe instead of railcars and trucks. It goes to trucks and units. And again, we’re really well supported to deliver on that. So it’s important that we remain in stock and we can provide that important service and value when our customers are in need of it and today represents that opportunity.
Mike Roxland: Got it. Its great color. And then just one quick follow-up on BMD. You guys did a terrific job shifting your mix to general line and EWP while minimizing commodity, given the volatility in commodities, we’re currently seeing and we have seen in the past, I mean, is there sort of a percent of commodity that you’re ultimately targeting? Is it going to be 30% of BMD make 25%? And over what time frame do you — are you looking to achieve that?
